Private student loan repayment options are a very important feature of applying for a private student loan. As a matter of fact, most students that apply for such loans fail to realize that there are several and often very budget-friendly private student loan repayment options available that are worth checking out before making an application for a private student loan. The plain truth is that lenders generally only offer a standard private student loan repayment option to the borrower-student who when they do not know better will either accept or reject the private student loan out of hand.
Benefits Of Student Loan Repayment Plan
A standard private student loan repayment plan can be of different types: full deferral, interest only and immediate repayment. The first named or full deferral means that the student does not have to pay the principal or even interest amount while they are still enrolled in an educational institute such as their college though this feature means being enrolled in a college or school for a maximum of four consecutive years.
In this private student loan repayment plan the student must begin repaying the principal along with interest after six months have passed since the date of their graduation.
The interest only private student loan repayment plan requires that the student pays only the interest that has accrued during the period that they were enrolled in a school (for maximum four consecutive years.) Then, forty-five days after graduating the student must begin repaying the interest and principal amount and the same applies if the student drops their enrollment to less than half-time.
Immediate repayment private student loan repayment plan means that the student must begin repaying the principal along with interest as soon as the loan has been completely disbursed to the student.
In a majority of instances the private student loan repayment period can extend to between ten to twenty-five years and if the loan amount is especially high, then the repayment period will also be longer. In certain cases, the student can upon showing economic hardship or public service or unemployment avail of a deferred private student loan repayment option.
Unfortunately, in this present tight economic scenario student loan debts continue to rise. The fact of the matter is that inflation has spiraled the costs of college education skywards and this is what is fueling the rise in loan debts among students. According to studies, about half of all recently graduated students had loan debts of up to ten thousand dollars and the average cost of college education rose twice the rate of current inflation. All this shows that students are going to have a tougher time repaying their student loans.